THE COMMISSIONER OF INCOME T vs. M/S.JOHN CRANE SEALING SYSTE

T.C.A. Nos. 534, 533 and 539 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.12.2021 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN and THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A. Nos. 534, 533 and 539 of 2021 and C.M.P. Nos. 19253 and 19276 of 2021 T.C.A. No. 534 of 2021:- The Commissioner of Income Tax Chennai.

... Appellant Vs. M/s. John Crane Sealing Systems India Pvt. Ltd. 1, Ground Floor, 'Casa Blanca' No.6, Casa Major Road, Egmore Chennai – 600 008 PAN : AAA CJ 2131J ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 17.11.2016 passed by the Income Tax Appellate Tribunal, Madras “C” Bench, in I.T.A. No. 1914/Mds/2015 for the assessment year 2010-11. For Appellant : Mr. T.Ravi Kumar Senior Standing Counsel T.C.A. No. 533 of 2021:- The Commissioner of Income Tax Chennai.

... Appellant 1/5 https://www.mhc.tn.gov.in/judis T.C.A. Nos. 534, 533 and 539 of 2021 Vs. M/s. John Crane Sealing Systems India Pvt. Ltd. 1, Ground Floor, 'Casa Blanca' No.6, Casa Major Road, Egmore Chennai – 600 008 PAN : AAA CJ 2131J ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 17.11.2016 passed by the Income Tax Appellate Tribunal, Madras “C” Bench, in I.T.A. No. 1913/Mds/2015 for the assessment year 2009-10. For Appellant : Mr. T.Ravi Kumar Senior Standing Counsel T.C.A. No. 539 of 2021:- The Commissioner of Income Tax Chennai.

... Appellant Vs. M/s. John Crane Sealing Systems India Pvt. Ltd. 1, Ground Floor, 'Casa Blanca' No.6, Casa Major Road, Egmore Chennai – 600 008 PAN : AAA CJ 2131J ... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 17.11.2016 passed by the Income Tax Appellate Tribunal, Madras “C” Bench, in I.T.A. No. 1912/Mds/2015 for the assessment year 2008-09. For Appellant : Mr. T.Ravi Kumar Senior Standing Counsel 2/5 https://www.mhc.tn.gov.in/judis T.C.A. Nos. 534, 533 and 539 of 2021

COMMON JUDGMENT (Judgment was delivered by R. MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, calling in question the correctness of the order dated 17.11.2016 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A. Nos. 1912 to 1914/Mds/2015, relating to the assessment years 2008-09 to 2010-11, by raising the following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the payments towards royalty is to be allowed as a revenue expenditure and not capital? (ii) Is not the finding of the Tribunal bad especially when the entire payment of royalty was capital in nature as it was for an acquisition of a technical knowhow license and was therefore capital in nature and only depreciation is to be allowed in view of Explanation 4 to Section 32(1)(ii) of the Income Tax Act?” 2. When the matters were taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, 3/5 https://www.mhc.tn.gov.in/judis T.C.A. Nos. 534, 533 and 539 of 2021 wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases, where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals are less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate cases. No costs. Consequently, connected miscellaneous petitions are closed. [R.M.D,J.] [M.S.Q, J.] 17.12.2021

Internet : Yes

Index : Yes / No Maya To 1. The Commissioner of Income Tax Chennai. 2. The Income Tax Appellate Tribunal, Chennai 'C' Bench. 4/5 https://www.mhc.tn.gov.in/judis T.C.A. Nos. 534, 533 and 539 of 2021 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. Maya T.C.A. Nos. 534, 533 and 539 of 2021 Dated : 17.12.2021 5/5 https://www.mhc.tn.gov.in/judis